tv Press Here NBC September 19, 2010 8:00am-8:30am PST
software s.a.p., is my guest this week. plus, using social networking to make social change. and mom and pop investors, read the stock market. a quarter trillion dollars taken out of equities. our reporters this morning, national public radio's laura seidel, and john schwartz of "usa today" this week on "press here." good morning, everyone, i'm scott mcgrew. three companies, motorola, research in motion, and s.a.p. have something in common. or two somethings in common. those three companies have among them six ceos, two each. at motorola, greg brown and sanjay ja and research in motion, mike ls aaeritis and jim
mcselly. the reasons behind the double duty vary as much as the companies, and the arrangements certainly wouldn't work everywhere. it's hard to imagine apple having more than one executive in charge. >> i'm very happy to be here today with you all. >> you could certain argue, double chief executives hasn't done much for motorola, which is consequence tamtly in the red. but like many small businesses often run by families or married couples, when it works, power sharing works well. bill mcdermott is the co ceo of s.a.p., based in waldorf, germany. 48,000 employees worldwide, s.a.p. has a history of co ceos, but bill is the first american to do so. thank you for joining us. >> thank you for having me. >> why does s.a.p. has a history of co ceos? >> very global company, always benefited from a balance of power.
usually one had the development function of the company, the other had the customer facing operations of the company. and it was that collaboration from the factory to the fox hole, if you will. >> is it cultural, though? is it that we're in so many places, we need somebody in charge on two sides of the ocean? >> i think it's helpful. i don't really think that that's the ultimate reason. i think two founders evolved the company as co ceos. it was very effect active at s.a.p. and stuck as a good business philosophy. >> it's not as unusual as people might think it is. just a google search. whole foods, smucker's, chipolte, papa john's, all food companies. but it isn't a completely unusual idea. we mentioned in the set-up piece, blackberry rimm, research in motion, and motorola. it's not annin creditably unusual idea. norvelths, and if you look at rimm as an idea that, has been very successful for many years now.
so i think if your culture enjoys a balance of power, a sharing of skills, the key success factor is trust. >> the obvious analogy is marriage. >> yes, absolutely. and, you know, it's important that those two folks are aligned and the kids don't run the house. >> and split up the company. >> yes, exactly right. >> have you ever run into the situation where somebody had to be in charge? i mean, because that's the obvious question, when you have co anything, is well, yeah, but whose in charge? >> yeah, i like to think we're both in charge. and two is better than one. if one is in beijing and the other is in germany or the united states or even latin america, it's good to have two that are in charge simultaneously. and we are in charge. and we are real-time. and we are very focused on the prize. so i think the benefactors here, s.a.p. share holders, clearing the employees who feel the energy, and obviously the equisystem, which is five or six times the size of our company, they know we're all about business software, innovation,
expanded equisystem, and beautiful execution for customers. >> it works well in your case, but i think we're all glad that apple doesn't have two ceos. apple works well with one. >> they sure do. and if that culture, that's perfect. they have a brilliant leader, and he has done an amazing job. and in their case, someone good enough, so go with it. >> if a company, and i'm talking about a big company, fortune 500 company, were mulling it over, saying, okay, here's a crazy idea, guys, what if instead of hiring one, we hire two. what advice would you give them? how do we know this is right? i'm sitting on the board. how do i know this is right for us? >> you have to have two individuals that are focused on shared values and common goals. the first thing we did is focus on the strategy of the company. so on february 7th, we dug in, and said we're participating in 110 billion market opportunities, we want to double that to 220 billion. how are we going to do that? we're going to understand where
markets are going, where customers need to go to win and we're going device a strategy, we'll align that strategy, align that vision, align that mission and align the passions of the company, so everybody moves as one. that's the key. do you have two people that trust each other, and are focused enough on the things that will make shareholders successful to actually place two in charge? >> we have had several situations in silicon valley and all over the world of ceos going up against the board. and either board or the ceo wins. sometimes one, sometimes the other. does being two ceos make you weaker against the board, stronger? >> i don't think it's a matter of against the board. we try to move as one with the board. so as i mentioned earlier, our strategy was ratified at the executive board level, and then we took it to the supervisory board to make sure everybody is on the same sheet of music. so the idea here is not for and against. the idea is collaboration.
>> the new talk and particularly in silicon valley, is cloud computing. you don't -- you like cloud computing, but you have sort of a twist to the idea of cloud computing. >> we believe that customers are going to have on premise business applications. they're going to have on demand or in the cloud applications. and, of course, they're going to have on device as the world becomes more and more mobile. we believe the big idea is to manage the business process, the data and the security across all of those platforms, so the ceos that say go with s.a.p. know that they are going to be rock-solid on a great platform, and they can be one of the best-run businesses in the world. >> you've always been good on the local device, on the computer in the office. are you good enough in the cloud? are you good enough to serve the mobile devices? are you ready for that? >> absolutely.
so, for example, if it's sales on demand, carbon management on demand, talent management on demand, or simply having a category killer, a business sweep, which we call business by design in the cloud multitenant, we know where the on demand market leader as well. the big idea that we added is the device. when we acquired side base we want we don't want to just be number one in business applications or business analytics, which we are also number one in, we want to be number one in mobile. when you consider that there will be 6.5 billion mobile workers running business applications on their hip by 2014, it was a pretty important category to be one number in. >> and most of those mobile devices or a good portion of them will be made by apple, which historically gives i.t. fellas just bits. >> we love apple. >> i love apple, too. the i.t. guy doesn't love apple always. >> well, we're trying to appeal
not just to the i.t. guy, but we're trying to appeal to ceos and executive managers. which is why we have enabled s.a.p., for example, to run on the ipad and i run the key business processes and the role kpis of my job on the ipad every day. i would also like to thank apple for being a great s.a.p. customer. >> bill mcdermott is the co ceo of s.a.p. we appreciate you being here this morning. >> thank you so much. >> coming up on "press here," a little later, a look at ats. that is exchange-traded funds. but next, the social networking book everyone is all atwitter about. "the dragon fly effect." when "press here" continues. [ male announcer ] as the ceo of hp, carly fiorina laid off 30,000 workers. dragon fly effect." when "press here" continues. dra" when "press here" continues. done somewhere else. k ne [ male announcer ] fiorina shipped jobs to china. and while californians lost their jobs,
fiorina tripled her salary. bought a million dollar yacht. and five corporate jets. i'm proud of what i did at hp. [ male announcer ] carly fiorina. outsourcing jobs. out for herself. [ barbara boxer ] i'm barbara boxer and i approve this message. welcome back to "press here." there is a famous margaret mead
quote about how a group of people can change a lot of individuals. but my next guest, author of "the dragon fly effect" would probably amend that quote by saying can change social media. his wife and coauthor is a stanford business professor and, in fact, the book is based on her popular class, called "the power of social technology". laura seidel of mpr. let me start with a question that i even warned you i was going to -- and i don't normally give away my questions, but i thought it was such a tough question, i thought i would warn you about this. well, duh, is my question. isn't there -- we have discovered that social media, social networking, the internet, have allowed one person to change the world. and you wrote a book about that. >> yeah, so okay -- so duh. what we have basically figured out is that -- or i think what
everyone has figured ow, to your point, there's plenty of books about the mechanics of using facebook and twitter and blogs and everything else, and they add a lot. but very few -- maybe nothing brings together what makes people work from a consumer behavior perspective, with the technology, good marketing tactics and just an understandeling of how to make it all roll from a operational perspective. >> could you quickly sort of sum up for people? what are sort of the basics? if you're starting a campaign that you want to bring across an idea to people or get them motivated, what are the sort of three basic things you want to make sure people would do? >> sure, i'll give you four. >> give me four. >> so "the dragonfly effect" is a model we developed with four elements. first one is focusing in order to measure your progress and aim towards. second step is about grabbing attention, making people look and making people sort of want
to click here or press here. i couldn't help myself . engage is the next step, story telling, how do you get people to care. it's enough just to get them to click, as we know, because clicking is very femoral. do you it and then you're gone. how do you get people to actually take that next step and, you know, actually convert. and the fourth -- >> the fourth -- >> i'm sorry. the fourth. >> the fourth step is where the real difference comes in. the first three steps are good components of a good marketing campaign. the fourth step is where you enable action. that means that of those people who get through those steps that click, there's a bunch, maybe 10%, maybe 20%, that want to do more. it's not enough to donate or volunteer one. they actually want to do something for your campaign and become part of your activity. you redeploy the tools you use to get them involved so they can get other people involved, whether it's to do a bone marrow drive or to actually, you know, do marketing on your behalf. that's what take action is about, and that's where the
magic happens. >> so you're giving examples of how to affect change for maybe a political standpoint, from a business point of view? like, for instance, we hear about the iranian election, maybe our own presidential election. from business point of view, what you're about -- the use of twitter by somebody like a ford or whomever. are there certain examples you could share with us on how that grass roots level has reached the mass audience? >> sure. you started with politics, i'll start with politics. the obama campaign is the best example. they brought in people early on from -- that had facebook experience, and basically built this thing, my barack obama.com, which not only engaged constituents, but actually united the grass root efforts of people who -- to get involved in the campaign with the campaign itself. >> and andy, political groups have said oh, we've got to harness the power of the internet before. one of the things that was remarkable about barack obama was if you go to his facebook page, and i don't know if he is still number one or not -- lady gaga. >> lady gaga. >> all right. >> two most important persons in
the world. but it shows, you know, what rock and roll music he likes. >> the idea is about being transparent. and what you said is kind of interesting. it represents the change in politics in the sense that before the guidance was don't put anything out there that you're -- you know that your opposition could use. and now it's more like, if you don't put something out there, that's an action in itself. it's saying there is probably something scary behind there. you know, barack obama put up that he likes "godfather" 1 and 2. in a previous era -- it would be political suicide, because people would say oh, he's going to run his administration -- >> r-rated. >> once you build that momentum, though, how do you sustain it? there's this huge movement and now it seems as if it's sputtering. and ironically, a few months ago, somebody from the -- republican point person was bringing up that exact point. >> you know, actually, i think the question is, if you were advising barack obama right now, as to how he would reengage
people, what would you tell him? >> well, he is my linked in friend, which is an interesting story in itself. but the -- i think the point is that, you know, you need to continue -- every one of these things can't be thought of as a simple campaign. the campaign was amazing, but it was a campaign. and a lot of marketers look at things the same way. they look at it as a single point in time. they don't look at it as a relationship. when you become facebook prepds with a person you don't think of it as like, okay, this is my friend for january or february, but a lot of marketers and people who are trying to, you know, affect a change or an outcome think of it that way. they think, okay, we're going to get over the hurdle and that's it. i think the point is to look at what's the ongoing engagement that you want to have, just apply the same sort of goal focus. the goal focus before was remarkable in the sense that it actually -- it actually really oriented towards getting everything on the line they did to take action on ground. now they need to figure out, how
can you -- how could you align similar goals now? to get people to take action? >> well, you gave an example in the book of a bone marrow transplant. somebody needed a bone marrow transplant, and there was this big campaign to suddenly get people aware of this particular problem with leukemia and matching people. and now it's become a sustained campaign. or so it seems from the book. is it is a sustained campaign? have they kept people engaged? >> so i think the help campaigns around saving two individuals that were sort of the centerpiece of the book and the inspiration for both the class and the book itself, it was actually interesting, because there isn't a sustained campaign around that, organized by those people. but the momentum, which it created, you know, led to a sort of snowball effect. the effort to save and match two individuals has led to hundreds of matching -- >> and that was the key there, was -- i mean, obviously, they tried to do it, because they compared about these people. but you don't try to save the
world from cancer, you try to save bob from cancer. and then that becomes identifiable. >> there -- does there have to be a personality or some sort of compelling reason or person behind these, like obama in this case? >> well, it helps, and when you've got one, use them. but i think the point is, it's really about the -- the mind of the person you're trying to convince. and usually, people relate to people better. >> right. bunchts, you know, you can believe in something. you can believe in saving the polar bears, you know, if you personify it. you can believe in saving the environment if you turn it down -- but as sort of the sally struthers thing proves, it somehow becomes more personal. >> there is definitely the personal identification part of it. and to that point, you know, in the appeals, kiva is a remarkable example of how they did that and turned that into an individual entrepreneur. >> remind people what kiva is, maybe. >> and just one quick mention and then we have to run to
break. >> kiva is a micro finance organization which allows people with as little as $25 to help an entrepreneur in the developing world get themselves out of poverty. >> excellent. andy, your book is "dragon fly effect effect" and out september 28th. >> thank you very much. up next on "press here," a disappointing stock market has left many investors feeling burned. maybe the answer isn't to invest in one company, but many. we'll talk about the abcsf etfs.
our state is in a real mess. and i'm not going to give you any phony plans or snappy slogans that don't go anywhere. we havto leinth mwiur. oeansiv we have got to take the power from the state capitol and move it down to the local level, closer to the people. and no new taxes, without voter approval. we have got to pull together not as republicans or as democrats but as californians first. at this stage in my life, i'm prepared to do exactly that. the chair woman of the securities and exchange commission recently said a general mistrust of the financial system has led individual investors, moms and pops, to pull billions out of the stock market. >> you know, it's times like these that etrade can really help you replan your investments. >> it turns out the stock market isn't as easy as the e-trade baby would have you believe.
the company's most hurt by mistrust of the market are those companies that cater to small investors who watched with mouths again as individual stocks plummeted during last spring's infamous crash. one proposal going forward, institute limits up and limits down on trades, much like the commodities markets do to iron out volatility. >> that's one of the reasons that we have really seen what's happening. >> another is to encourage investor diversification. nomar eggs in one financial basket. one way to do that is to forget investing in one stock, and invest instead in something called an exchange traded fund, an etf, a collection of stocks bought and sold together. baila is with charles this swab, laura seidel of mpr.
so educate the brand-new investor on etfs, index funds, right? >> slightly different. so an exchange traded fund is basically an index fund that trades like a stock. and what it does is, it mimics or it represents a basket of individual stocks, bonds, commodities -- >> sounds like a mutual fund. so what's the difference there? >> so it trades like it's an individual security, so it trades throughout the day. >> i can buy it or sell it any time. >> right. a mutual fund trades one time a day, you get the price at the end of the day. an exchange traded fund trades throughout the day, you're able to buy, sell. >> why would i want to do this, as opposed to a mutual fund? >> well, it's -- a couple things with it is some of the traders like to be able to trade throughout the day, so you have liquidity of it. there are tax aspects of it that are a little bit more favorable
for the etf buyer. and the fees associated with it, the operating expense generally are going to be less for the exchange traded funds than it is for the mutual funds. >> i guess the other question is, given all the volatility in the stock market, a lot of people are, including myself, are nervous about investing in the market right now. why would i want to buy this right now? >> well, it's -- it's one of those things, some clients are looking and are comfortable purchasing -- let's say large cap stocks, and they spend the time and do the research to buy them. what they're find something, they don't have the time or maybe even the energy to do the diversification part of it. and they're looking at, okay, i'm going to purchase a etf -- a fixed income etf. and get a basket of fixed income. small cap international exposure. and that way, they get the full exposure to the market. >> some wondering, just kind of touching on what laura asked, what scenario, like an ideal scenario would somebody take
part in etf, the volatility again -- >> well, it would smooth out the volatility, wouldn't it? and under most situations? >> it would smooth out the volatility, and as opposed to, like you said, purchasing one or two stocks, you're all of a sudden getting' large basket of stocks that are large cap or small cap or something that mimics the s&p 500, and you're taking the volatility hopefully out of your portfolio. >> if this basket has, you know, two shares of invidia, five shares of intel -- making this up, eight shares of hp, et cetera, the price is what those shares would trade at otherwise, right? i could calculate price in my head, couldn't i? >> it trades slightly different. >> because of the potential of what might happen? >> no, more because you're trading -- a mutual fund trades -- you trade with a mutual fund company. an exchange traded fund, you trade over the market and you trade with another investor. and is you have basically somebody buying and selling and able to set your price, able to sell it at the market, able to
sell it at a limit price, but you're selling with another investor. >> so is it broken down -- i don't know, is it a technology etf or an international etf -- how are they broken down? >> can you mix different stocks? >> you can do a number of things. so if you wanted to go very basic, you could say i want to look at something like a etf that is tracked to the s&p 500 and i want to do something that's small cap and i want to do something that's international and maybe gold. but you could also say you could get very specific and say i'm going to look at some commodities for a small piece, i'm going to look at a specific type of fixed income product. i'm going to look at a large cap blend. you could look at very, very specific, as well. >> what is schwab's skin in the game as far as offering this? what does schwab get out of offering a new product? >> well -- >> besides the goodness of their heart? >> we offer -- we have 11 specific etfs that schwab offers
and we can also certainly trade all the different etfs that are available out there. our clients are basically looking for, you know, assistance with some of the diversification. they're trying to find a way to get involved in different segments of the market at a reasonable price. >> but are there increased fees because of it, or what causes a company to say we are going to offer this product? >> what is schwab getting? you must be getting some profit somewhere. >> i think what we're finding is 2005 there were about 200 exchange traded funds out there. end of 2009, there were about 800, end this year, close to 1,000. so we're finding our clients are very much asking for this product. and -- >> is it one of your fastest growing products? >> yeah. we -- you know, we have just over the last two years basically come out with these 11 products, the last three the fixed income products just over the last couple months. >> so it is a very quickly growing product. >> so basically, though, what
you get is whatever price you charge when something is traded. >> yeah, well -- and for the this swab -- for the schwab exchange traded funds if you're trading online at schwab, we don't charge a fee for it. >> with one minute left here, i want to ask, is that a fair criticism that the chair woman of the sec made? she is measuring the amount of money that came out. what is the investors' attitude toward the market these days? when these newscastters say dow industrial is up 30 points, does anybody care anymore? >> i think they care, and i think they hear the news a lot and really hear from day to day. i think what clients are asking for is help and guidance, trying to get a better understanding what's happening with the markets. and really try to gauge, you know, what they should be doing. what i think we're encouraging our clients to do is really understand their risk tolerance, understand their time horizon, understand what their goals are. and really kind of have a plan in place moving forward.